Orrenius on Immigration

Pia Orrenius, a senior economist at the Federal Reserve Bank of Dallas, has an op-ed in today's Wall Street Journal. I was fortunate to have Pia on my staff at Council of Economic Advisers from 2004 to 2005, when she was the lead author of the chapter on immigration in the 2005 Economic Report of the President.

An excerpt from today's article:

The stereotype of the hard-working immigrant still rings true in our country. Male immigrants have labor force participation rates of 81%, exceeding U.S.-born men's participation rate of 72%. Illegal immigrant men have even higher participation rates -- around 94%....

Economists have noted time and again that the effect of immigration on natives' wages is small. In a study with Madeline Zavodny of Agnes Scott College, we found that during the mid- to late-1990s, immigration had a small negative impact on manual laborers' wages -- about 1% -- but did not adversely affect the wages of professionals or service workers....

Immigration's impact on wages has little relevance on the debate over how we deal with the 12 million illegals in this country -- because there has been virtually no interior enforcement of immigration laws, these immigrants have largely been incorporated into the labor force, and prices and wages have already responded to their presence. It is estimated that over half of the illegal immigrants are working "on the books," paying income and payroll taxes. Bringing the rest of them into compliance will actually raise the cost of employing them. This aspect of legalization should even the playing field and help, not hurt, native-born workers.

You can read an interview with Pia here.